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CME to offer weekly options on copper, silver and gold

Keywords: Tags  CME Group Inc., weekly option contracts, copper, silver, gold, Saranja Kapur

NEW YORK — CME Group Inc. plans to launch weekly option contracts for copper, silver and gold, effective April 13, the company said in a statement March 20. 

The options, which will expire on Fridays and provide four weekly expirations and one monthly, will allow market participants to manage their risk around short-term indicators, according to CME Group senior director for commodity products Damon Leavell. 

“We already have longer-dated futures, and the weekly options will allow people to hedge risk over shorter time periods,” Leavell said. “For example, customers can now hedge risk around weekly economic releases.” 

Leavell does not believe the weekly options would be a substitute for the longer-dated monthly options. “They will provide a way for traders to deal with short-term volatility. We foresee them being a complement to the existing options on offer.”

“Comex options are very thinly traded—and what does trade only trades on the floor—so for copper it will be a nonevent,” a copper trader said. “The CME can basically roll out contracts at will, but there won’t necessarily be demand for them.”

Chicago-based CME Group previously tried to launch short-term gold options in 2012; however, liquidity in these options has remained low. 

“We have consulted with our customers and they have been positive about this offering,” Leavell said.  

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